In this sense it is important to recall that the confusing news arrived from Ukraine last Friday, still unexplained about the destruction of a Russian military convoy on Ukrainian territory by the security forces of this country, were enough for European stock markets turned radically low and investors returned to refuge in safe assets as sovereign bonds. Very remarkable was the fact that the German 10-year bond closed the session for the first time in history below the threshold of 1.0%, which seemed chimerical only few weeks ago.
In this behavior we understand the key role of recent macroeconomic figures published in Germany and in the Euro Zone, which points to a strong new slowdown in economic growth in the region, as investors are betting that in an environment of low inflation and anemic growth, the ECB is going to be forced to intervene, probably launching bond purchases program in the secondary markets. Meanwhile, the Ukrainian conflict, we do believe it has played an important role in the economic slowdown, especially in what refers to the German economy, where the conflict has undermined the confidence of businessmen, investors , analysts and consumers. That is why the development of this conflict will be key to understand the evolution of the European stock markets, at least in the short term.